CNBC Interview with Brad Garlinghouse, Ripple CEO

Below is the transcript of an exclusive CNBC interview with Brad Garlinghouse, Ripple CEO, and CNBC’s Arjun Kharpal at Money 2020 in Amsterdam

AK: So Brad, Ripple’s technology allows big cross-border, cross-currency transactions using blockchain technology, it settles much quicker and cheaper than current processes too and with a lot more transparency. But you also issue a token known as XRP, can you run us through how these work and what the relationship is?

BG: It’s a great question and it’s an important question because I think there’s been a lot of confusion and misinformation. There’s a company called Ripple, and Ripple is focussed on solving the exact problem you described. How do we make cross-border payments massively more efficient, for remittances for corporates. We use a digital asset called XRP as part of that flow and we use XRP because it’s a thousand times faster than bitcoin transactions and a thousand times cheaper than a bitcoin transaction. We think that the utility of XRP is such that it’s the most efficient digital asset to solve this problem on cross border payments. So, Ripple the company is really building on top of this open-sourced eco-system that I call the XRP eco-system, and Ripple’s building vertically on top of that – as a payments company.

AK: You, you’ve signed up a lot of real-world clients, big banks as well, and they’re using your xCurrent products as well, but not necessarily using the XRP token which has prompted a few people to ask, you know, what’s the value of XRP if it’s not being used on a wide-scale right now. How do you respond to that?

BG: Well the first problem that Ripple focussed on is really engaging with those banks to solve a real-world problem for them. So we’ve been successful, as you mentioned, signing up over hundred banks using a product which we call xCurrent, and xCurrent allows two banks to settle in fiat, but basically in real-time. Today that takes days, it’s very expensive, it has a very high air rate, it has six percent. So that that works when there’s two banks that are working together that already have fiat. If we wanted to go to a third bank where we don’t have liquidity, where we don’t have a prefunded account, that’s where products like XRapid comes into play. XRapid uses XRP to fund real-time liquidity, so no longer do I have to prefund. There’s trillions of dollars parked around the world, prefunded in between banks, between corporates, corporates at banks, and if we can make that – those trillions of dollars more efficient we make the entire global financial ecosystem more efficient.

AK: And when do you expect those, that kind of product, to actually be rolled out a little bit more? I mean you’ve obviously done the initial work..

BG: Yep…

AK: …getting some of those banks on board to the xCurrent product, so when does XRP begin to become more useful to…

BG: Absolutely…

AK: …those institutions?

BG: So we launched X-rapid, the product we were just talking about, we launched that as a beta product late Q3, early Q4 last year. We announced our first pilot to customers on XRapid in late Q4. We announced six more in Q1, and these are big names in the remittance world, names like Western Union and Moneygram, and Mercury FX, these are companies you know moving a lot of money and what we have found is that XRapid is saving them between 40 and 70 percent compared to their existing tools from managing and spreading liquidity around. So XRapid is doing exactly what we thought, we expect it to go into production with that product out of beta production very very shortly, and we think as we continue to move from a beta product to a product we’ll see more and more banks, more and more other financial institutions get on board.

AK: And that will be used in the XRP token in order to facilitate these processes?

BG: That’s exactly right. The point I’ve made continually as I’ve heard sceptics really spread misinformation, the point I’ve made repeatedly is if we can deliver a better product for a better price banks and other financial institutions will get on board.

AK: How do you value XRP? We’ve seen many people try to you know go up above three dollars and drop back down. What’s your outlook as you see this product being rolled out across major financial institutions about the value of this?

BG: I think the value of any digital asset is going to be derived by the utility that it creates. So I think there’s a lot of hype in this space and I think as the hype and the reality come into equilibrium those markets will be less volatile, and I think what we’re seeing today is a very nascent market, there’s a lot of volatility. I don’t know how to predict the price of XRP, I wouldn’t even dare try. We’re one player in the XRP eco-system but there’s other players as well and so I think as we do things that enhance the utility of XRP we’ll continue to see that eco-system grow and be healthier and healthier.

AK: Do you have an outlook or an aspiration or ambition as to how many institutions you hope will be using this token to facilitate these real-world transactions, by say the end of the year or even the end of next year?

BG: Well I’ve publicly stated that by the end of this year I have every confidence that major banks will use XRapid as a liquidity tool this calendar year. You know, by the end of next year I would certainly hope that we would see you know in the order of magnitude dozens. But, you know, we also need to continue to grow that eco-system, grow the liquidity, and it all comes back to if we’re solving a real problem for real customers. There’s so many different examples of this this space, there’s ICOs where I don’t really understand the problem the token is solving. Those are ones where I I’m very sceptical about what the future of that value looks like.

AK: Right now by market capitalisation XRP is the third largest token on the market, behind Ethereum, behind Bitcoin, do you believe it has the ability to displace both of those as the largest, given the belief you have in its utility?

BG: Well I don’t really think about it as one versus the other. I mean it’s actually unfortunate I think that there’s some people in this, the crypto space, the blockchain space, for them it’s almost a holy war of one versus the other. I don’t look at that at all. I think that what we’re seeing is the overall growth of this space and there will be many winners. And I’m actually, and I’ve publicly shared that I am long bitcoin, I am long bitcoin cash, and I think they will continue to be many boats that rise as the sea rises around the blockchain space overall.

AK: Talk to me about how you actually see bitcoin panning out. We’ve had for example Jack Dorsey, the CEO of Twitter, says that he believes this could be a global currency in about ten years and we know that bitcoin at the moment doesn’t act like a currency, its high transaction times, it’s expensive, it’s volatile. So what does bitcoin’s role be in the future? Does it have a role?

BG: I think bitcoin will have a role. I think it’s not going to be the panacea that people once thought it would be where it would solve all of these different kind of problems and instead you’re seeing specialisations of different kind of ledgers, different kinds of blockchains. The bitcoin blockchain is quite slow. Originally people thought it might solve a payments problem but when you have an asset like XRP that’s a thousand times faster and a thousand times cheaper on a per transaction basis bitcoin can’t really compete on that level, you know an XRP transaction costs fractions of a penny and it settles in three seconds. Comparatively you have bitcoin taking you know 45 minutes, sometimes hours to settle a transaction, and it can take you know the cost can be three dollars to 30 dollars. So that might cheaper than the alternative in today’s banking system but it’s not really an internet of value, a true step forward in how we can allow value to move the way information moves today.

AK: So what do you see bitcoin being then in the eco-system? Is it just, is it a store of value or not?

BG: I think it is a store of value. I mean, I, look, we as a world have decided to store a value to a tune of about a 130 billion dollars – not sure of the current market cap – but that’s a store of value, it’s hard to argue that.

AK: Governments have talked a lot about trying out fiat versions of digital currencies of some sort. It’s experimental with its thoughts of the moment. But will these work and what do you see the advantages being if governments begin to issue fiat digital currencies?

BG: Well it’s kind of funny. I don’t, if I reached into my wallet right now and I took out a bill, bills already are digitised in some ways. They have a serial number, right. And you think about well it has a serial number, what’s the difference between being tokenised as a digital asset and tokenised with a serial number? We can argue that a little bit but the point being I think that banks, central banks, governments, if we have a better solution, a more efficient solution then people are going to use that. And when we think about that for Ripple and what we’re using XRP for you still have the need for a cross-border transaction. You’re still getting an in and out of pounds or Euros, or dollars, or Yen, around the globe, and so we’re going to continue focussing on that. We think that those that believe that cryptocurrency is a challenge to fiat, I would disagree with that. The dollar where I live is quite efficient. The pound is quite efficient. Here in the Netherlands certainly the Euro is very efficient.

AK: Right, I want to get your thoughts as well on a separate issue. There’s been a lawsuit filed against Ripple the company, alleging that XRP is a security, it’s a quote “performing a never ending initial coin offering”. How do you respond to some of those claims as well?

BG: My my view on this is pretty outrageous. Here’s somebody who held XRP for I think two weeks’ time and is making some claims – you know, whether or not XRP is a security is not going to be dictated by one lawsuit. The SEC has obviously, the SEC, the United States is the governor of that and I think it’s very clear that XRP is not a security, you know, it does exist independently of Ripple the company. If Ripple the company is shut down tomorrow the XRP eco-ststem would continue to exist. It’s an independent, open-sourced technology. From an ownership point of view, owning XRP doesn’t give you any ownership of Ripple equity. And also, as we just talked about, XRP has a lot of utility, so to me it’s quite different than what a security you know looks like and I think ultimately we’ll find that conclusion.

AK: Is regulation a tool or risk to you business?

BG: Actually, I think regulation is a benefit to our business. I think those that think the blockchain revolution is to attack the government or attack regulation is wrong. You know the blockchain revolution is happening from within the system not outside the system. I think that one of the reasons why Ripple has enjoyed so much momentum is because we’ve been working with regulators. We count the Bank of England as a customer of ours. The Saudi-Arabia Monetary Authority is a customer of ours. We’re working with other central banks around the world and I think it’s because of that engagement we’re continuing to see them embrace and see the benefits of using these technologies.

AK: What happens if XRP is classed as a security? What does that mean for your XRapid product for example?

BG: I, I, I can’t think of any arguments why XRP would be deemed a security and so I I’m not too worried by it.

AK: And just a real final quick one. We saw cryptocurrency market sore to record levels last year but that a bit of that air has come out, is that just a short-term blip in what is a longer term growth story for this?

BG: Yeah, I mean look, it’s hard to predict the the gyrations of those markets. I think they are as I said earlier, a kind of nascent market and they’ve seen a lot of volatility. If we create a lot of value by solving real problems for real customers the hype and reality will solve that and I think you’ve seen hype get ahead of reality in many markets and certainly in this market as well, but I think as we see this play out not over three days or three weeks or three months, but over three to five years, I think you’re going to see some you know more rational behaviour and the markets behave as you’d expect as they grow.

CNBC is the leading global broadcaster of live business and financial news and information, reporting directly from the major financial markets around the globe with regional headquarters Singapore, Abu Dhabi, London and New York. The TV channel is available in more than 410 million homes worldwide.

CNBC.com is the preeminent financial news source on the web, featuring an unprecedented amount of video, real-time market analysis, web-exclusive live video and analytical financial tools.

CNBC is a division of NBCUniversal. For more information, visit www.cnbc.com.

Definitions

Personal Data – any information relating to an identified or identifiable natural person.Processing – any operation or set of operations which is performed on Personal Data or on sets of Personal Data.Data subject – a natural person whose Personal Data is being Processed.Child – a natural person under 16 years of age.We/us (either capitalized or not)

Processing is limited to the purpose. Our Processing activities fit the purpose for which Personal Data was gathered.

Processing is done with minimal data. We only gather and Process the minimal amount of Personal Data required for any purpose.

Processing is limited with a time period. We will not store your personal data for longer than needed.

We will do our best to ensure the accuracy of data.

We will do our best to ensure the integrity and confidentiality of data.

Data Subject’s rights

The Data Subject has the following rights:

Right to information – meaning you have to right to know whether your Personal Data is being processed; what data is gathered, from where it is obtained and why and by whom it is processed.

Right to access – meaning you have the right to access the data collected from/about you. This includes your right to request and obtain a copy of your Personal Data gathered.

Right to rectification – meaning you have the right to request rectification or erasure of your Personal Data that is inaccurate or incomplete.

Right to erasure – meaning in certain circumstances you can request for your Personal Data to be erased from our records.

Right to restrict processing – meaning where certain conditions apply, you have the right to restrict the Processing of your Personal Data.

Right to object to processing – meaning in certain cases you have the right to object to Processing of your Personal Data, for example in the case of direct marketing.

Right to object to automated Processing – meaning you have the right to object to automated Processing, including profiling; and not to be subject to a decision based solely on automated Processing. This right you can exercise whenever there is an outcome of the profiling that produces legal effects concerning or significantly affecting you.

Right to data portability – you have the right to obtain your Personal Data in a machine-readable format or if it is feasible, as a direct transfer from one Processor to another.

Right to lodge a complaint – in the event that we refuse your request under the Rights of Access, we will provide you with a reason as to why. If you are not satisfied with the way your request has been handled please contact us.

Right for the help of supervisory authority – meaning you have the right for the help of a supervisory authority and the right for other legal remedies such as claiming damages.

Right to withdraw consent – you have the right withdraw any given consent for Processing of your Personal Data.

Data we gather

Information you have provided us with
This might be your e-mail address, name, billing address, home address etc – mainly information that is necessary for delivering you a product/service or to enhance your customer experience with us. We save the information you provide us with in order for you to comment or perform other activities on the website. This information includes, for example, your name and e-mail address.

Information automatically collected about you
This includes information that is automatically stored by cookies and other session tools. For example, your shopping cart information, your IP address, your shopping history (if there is any) etc. This information is used to improve your customer experience. When you use our services or look at the contents of our website, your activities may be logged.

Information from our partners
We gather information from our trusted partners with confirmation that they have legal grounds to share that information with us. This is either information you have provided them directly with or that they have gathered about you on other legal grounds. See the list of our partners here.

Publicly available information
We might gather information about you that is publicly available.

How we use your Personal Data

We use your Personal Data in order to:

provide our service to you. This includes for example registering your account; providing you with other products and services that you have requested; providing you with promotional items at your request and communicating with you in relation to those products and services; communicating and interacting with you; and notifying you of changes to any services.

enhance your customer experience;

fulfil an obligation under law or contract;

We use your Personal Data on legitimate grounds and/or with your Consent.

On the grounds of entering into a contract or fulfilling contractual obligations, we Process your Personal Data for the following purposes:

to identify you;

to provide you a service or to send/offer you a product;

to communicate either for sales or invoicing;

On the ground of legitimate interest, we Process your Personal Data for the following purposes:

We Process your Personal Data in order to fulfil obligation rising from law and/or use your Personal Data for options provided by law. We reserve the right to anonymise Personal Data gathered and to use any such data. We will use data outside the scope of this Policy only when it is anonymised. We save your billing information and other information gathered about you for as long as needed for accounting purposes or other obligations deriving from law, but not longer than 1 year.

We might process your Personal Data for additional purposes that are not mentioned here, but are compatible with the original purpose for which the data was gathered. To do this, we will ensure that:

the link between purposes, context and nature of Personal Data is suitable for further Processing;

the further Processing would not harm your interests and

there would be appropriate safeguard for Processing.

We will inform you of any further Processing and purposes.

Who else can access your Personal Data

We do not share your Personal Data with strangers. Personal Data about you is in some cases provided to our trusted partners in order to either make providing the service to you possible or to enhance your customer experience. We share your data with:

Our processing partners:

facebook.com

google.com

bing.com

twitter.com

pinterest.com

Our business partners:

facebook.com

google.com

bing.com

twitter.com

pinterest.com

Connected third parties:

facebook.com

google.com

bing.com

twitter.com

pinterest.com

We only work with Processing partners who are able to ensure adequate level of protection to your Personal Data. We disclose your Personal Data to third parties or public officials when we are legally obliged to do so. We might disclose your Personal Data to third parties if you have consented to it or if there are other legal grounds for it.

How we secure your data

We do our best to keep your Personal Data safe. We use safe protocols for communication and transferring data (such as HTTPS). We use anonymising and pseudonymising where suitable. We monitor our systems for possible vulnerabilities and attacks.

Even though we try our best we can not guarantee the security of information. However, we promise to notify suitable authorities of data breaches. We will also notify you if there is a threat to your rights or interests. We will do everything we reasonably can to prevent security breaches and to assist authorities should any breaches occur.

If you have an account with us, note that you have to keep your username and password secret.

Children

We do not intend to collect or knowingly collect information from children. We do not target children with our services.

Cookies and other technologies we use

We use cookies and/or similar technologies to analyse customer behaviour, administer the website, track users’ movements, and to collect information about users. This is done in order to personalize and enhance your experience with us.

A cookie is a tiny text file stored on your computer. Cookies store information that is used to help make sites work. Only we can access the cookies created by our website. You can control your cookies at the browser level. Choosing to disable cookies may hinder your use of certain functions.

We use cookies for the following purposes:

Necessary cookies – these cookies are required for you to be able to use some important features on our website, such as logging in. These cookies don’t collect any personal information.

Functionality cookies – these cookies provide functionality that makes using our service more convenient and makes providing more personalised features possible. For example, they might remember your name and e-mail in comment forms so you don’t have to re-enter this information next time when commenting.

Analytics cookies – these cookies are used to track the use and performance of our website and services

Advertising cookies – these cookies are used to deliver advertisements that are relevant to you and to your interests. In addition, they are used to limit the number of times you see an advertisement. They are usually placed to the website by advertising networks with the website operator’s permission. These cookies remember that you have visited a website and this information is shared with other organisations such as advertisers. Often targeting or advertising cookies will be linked to site functionality provided by the other organisation.

We use Google Analytics to measure traffic on our website. Google has their own Privacy Policy which you can review here. If you’d like to opt out of tracking by Google Analytics, visit the Google Analytics opt-out page.

Contact Information

email: contact@widebitcoin.com

Changes to this Privacy Policy

We reserve the right to make change to this Privacy Policy.

You can configure your Internet browser, by changing its options, to stop accepting cookies completely or to prompt you before accepting a cookie from the website you visit. If you do not accept cookies, however, you may not be able to use all portions of the WideBitcoin Websites or all functionality of the Services.

Please note that disabling these technologies may interfere with the performance and features of the Services.

You may also disable cookies on the WideBitcoin Sites by modifying your settings here:

Visitor comments may be checked through an automated spam detection service.